Confusion characterizes the gender pay gap

A concept known as Simpson’s Paradox says you can’t infer results from population samples that have differing “lurking variables.”

Andy Spurlock Las Vegas

April 14, 2018 - 9:00 pm

Richard Brian Las Vegas Review-Journal @vegasphotograph

Victor Joecks’ Wednesday column (“Blame women and their choices for gender pay gap”) is accurate in considering socioeconomic choices for causing the national “raw” gender pay gap figures. As a compensation professional, however, I can tell you the biggest factor is simple math.

A concept known as Simpson’s Paradox says you can’t infer results from population samples that have differing “lurking variables.” With national gender pay gap figures, those variables are plain and simple. Different companies will pay different amounts for the same job, and they may do so for multiple reasons. Examples may include competitiveness or geography. You cannot combine their data.

Say one male in a Silicon Valley firm makes $100k, and a female doing the same work in a different Oklahoma City firm makes $80k. In this two-person profession, the pay gap is 80 percent — though each company had its own reasons to pay these amounts. Now, let’s say that each firm wants to be more progressive and hires two more females and only one more male for the same title, and at the same existing $100k and $80k amounts, respectively.

Each company is doing what it should — paying men and women equally for the same work. Combine all the data, however, and the pay gap is now 94.3 percent. This is because there are more women making the lower rate in Oklahoma City than there are making the higher rate in Silicon Valley.

This isn’t necessarily a lack of understanding of deep societal issues, it’s a basic failure of fifth-grade math.